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Gas Tax Increase Could Be Costly

Gas Tax Increase Could Be Costly

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The leader of a group created nearly four decades ago to lobby for a smaller state government and reduced taxes say Iowa legislators will pay a price in 2016 if they support a gas tax increase in 2015. Rob Solt (rhymes with “bolt”) is president of Iowans for Tax Relief, a group urging lawmakers to vote against any bill that would raise the state gas tax.


Here’s how the formula works: nearly half of the money raised by those taxes is kept by the state, with 20 percent going to cities and the rest going to counties. Solt suggests the state should keep less and share more with local governments.


It appears momentum is building at the statehouse for a gas tax increase, however. Key legislators yesterday said a vote on a 10-cent hike in the per gallon gas tax could come in February and the higher tax rate might take effect as soon as March.

The state taxes every gallon of regular gas at 21 cents. Ethanol-blended gasoline is taxed at 19 cents per gallon. The state tax on diesel is 22-and-a-half cents per gallon. Those tax rates were set in 1989. Gas tax revenue is declining because vehicles are more fuel efficient and supporters of a gas tax increase say the state is at least 215 million dollars short each year of what’s needed to fix up and expand Iowa’s transportation system.

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